"This report issued by the US side continues to play up the fallacy of China's military threat."

The row comes shortly after the new US president Barack Obama's campaign pledge to improve relations with China.

More recently, he has also said he specifically wants to improve military contacts with Beijing to head off future maritime standoffs in the South China Sea such as the one which occurred between US survey ship HMS Impeccable and Chinese vessels earlier this month.

Qin Gang asked the United States to stop issuing the annual report to "avoid further damage to the two sides' military relations."

The Pentagon said in its report to Congress that China's pursuit of sophisticated weaponry was altering Asia's military balance and could be used to enforce its claims over disputed territories.

China has kept up major investments in its armed forces and made advances in hi-tech weaponry that outpace other countries in the region, the defence department said in the report, issued on Wednesday.

The Chinese foreign ministry reaction came shortly after it also reacted harshly to a resolution by US politicians pledging defence of Taiwan.

"The Chinese side expresses its strong dissatisfaction and has made solemn representations with the US side," spokesman Qin said in a statement posted on the foreign ministry's website.

The US Congress passed a resolution Tuesday vowing "unwavering commitment" to Taiwan's security and calling the 1979 Taiwan Relations Act a "cornerstone" of US policy.